The 1 Factor That Could Boost Apple Inc. 20% to $155

What: Shares of technology behemoth Apple , the largest company in the world with a market valuation of $753 billion, inched higher by $0.27, or 0.2%, to close at $129.36 in Tuesday's trading session after analysts at Oppenheimer substantially raised their price target on its stock.

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So what: According to Andrew Uerkwitz, the covering analyst at Oppenheimer who kept his firm's "outperform" rating steady on Apple but boosted its price target from $130 to $155, the next step in Apple's evolution will be the upcoming release of the Apple Watch.

In the words of Uerkwitz via his research note,

Uerkwitz anticipates the recently announced March 9, 2015 event will focus predominantly on the Watch (sales strategies, shipment timing, and functionality), but he also anticipates we'll hear more about Apple TV, MacBook Air, and perhaps a streaming service combining iTunes Radio and Beats Music in the first half of 2015.

In addition to the Watch, which Uerkwitz not-so-subtly singles out as his primary factor for the price target increase, increasing iPhone revenue and better performance in emerging markets led him and his team to raise Apple's price target to $155, implying 20% upside from Tuesday's closing price. This price target implies a forward P/E of 13 based on 2016's projected EPS, plus $25 net cash per share.

Oppenheimer also listed a few risks to its investment thesis, focusing on the potential for slower iPhone sales or weaker than expected margins on the Apple Watch. It also commented that foreign currency translation could continue to hamper Apple's margins.

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Source: Apple.

Now what: The question investors need to ask themselves here is whether or not Apple could truly motor another 20% higher, to a valuation of just over $900 billion.

I personally believe that if the Apple Watch is even half the success Wall Street expects it to be, Apple could achieve the $155 level.

Nearly all facets of Apple's business are clicking. It sold a record 74.5 million iPhones in the first-quarter, and, according to Canaccord Genuity,gobbled up 93% of all smartphone profits during the critical fourth quarter. The company has also successfully introduced, or is set to introduce, a number of new platforms, including Apple Pay, which has the opportunity to transform mobile payment platform safety, as well as the upcoming Watch, which could be a perfect play on consumers' desire for wearable technology. In short, there's no shortage of innovation at Apple.

As I've stated previously, the biggest threat to Apple could be itself. If its products get so advanced that consumers skip the upgrade cycle then its valuation could be called into question. However, as it stands now with $178 billion in cash on its books (including overseas cash) and the company valued at 13 or 14 times forward earnings (depending on your source), Apple still appears attractive to me.